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Facebook’s stock is now idling at just below $20 a share, and the news that early investor Peter Thiel has decided to cash out his shares isn’t likely to fill would-be investors with confidence.

Image by Michael Scrivener via CrunchBase

Reddit co-founder Alexis Ohanian was on CBS News talking about why Facebook can’t seem to get close to that massive IPO price. He echoed the concern that a business model based on display ads just isn’t going to cut it in the long run.

“If they’re doing to justify [that price] they’re going to need to do something more than just display ads,” he said.

More than that, his main concern was that Facebook needed to make a user-centric experience in order to move past that most basic method of monetizing traffic. In the past, the company has taken for granted that people would continue to use the service, pushing forward unpopular features and privacy settings. Users have continued to grow – for now.

“Facebook is still a huge, huge company,” said Ohanian. “If they can invent their way to a business model that still respects users -- because they are notoriously fickle – it’s going to take something big.

“But I think they’ve got the right company in the company to do it,” he continued.

Alexis Ohanian knows something about building a website based on user respect – Reddit is run almost entirely by users, from the basic function of voting stories up and down to higher-level management of subreddits.

Facebook is a different beast, but Ohanian is right – even if people still use the service to look at baby photos and vacation videos, there’s a general distrust surrounding privacy that might hold back higher-level revenue streams, like retail or Facebook credits. If Facebook can convince users that it cares about them, it might be able to get them to get more involved with the site.